Technology, markets and society are developing at such a fast pace that many businesses find it hard to adapt using their present approaches. However, “time to market” is more important now than ever. The winner of the race is whoever comes up first with an in-demand key technology or an innovative service offer.
More and more often, being second best means a lost opportunity. This applies to single solutions as well as to entire markets. The size of a company regardless of past success, no longer ensures a secure future. Quite to the contrary – large companies with rigid structures and processes are often their own worst enemy, when it comes to responding quickly and flexibly to market trends or to shaping new markets because of their organisation and culture.
Conventional planning methods reach their limits just as familiar project structures, standardised processes and hierarchical decision-making paths. They are too complicated, slow and inflexible, particularly in relation to demands that are complex and require a wide range of competencies across departments. In the end, only one thing matters: a fast solution that fits and an innovative, competitive offer.
Intelligent networks, agile teams, a culture of trust take advantage of new opportunities by making radical changes. This creates a challenging situation for German medium-sized companies – but at the same time it provides many market opportunities. Anyone who wants to benefit from these opportunities cannot rely solely on existing strengths, such as; expertise of employees, efficient production processes, strong sales and competent team in research and development. The key to success will be to break down procedures that are too rigid and to combine the company’s strengths in new ways. In order to be able to provide individual and economical customer solutions and innovative products, it is important that competencies and expertise in all areas are brought together to achieve quick success. Agile teams collaborate as intelligent networks on a temporary basis: transparent and trustworthy, free of departmental borders, hierarchical functions and standardised processes.
For many companies, this means radically changing the way they think and act. Who dares to lead without power? This poses major challenges for management, since foundations have to be laid quickly, credibly with a contemporary understanding of communication, leadership and cooperation. In many company departments, classic hierarchical leadership is on its way out. Efficient team work in a culture of trust requires an entirely new understanding of leadership. A culture of cooperation, sharing of knowledge and expertise will be the future basis for economic success. Leadership will then primarily involve a planned dialogue and targeted coaching within a strategic framework.
Companies need to break down structures and dare to try new things while securing core processes and business. Large areas of the company will have to run as usual, because they secure the existing business and finance tomorrows’ innovations. Everything. Remains? Different!
In order to survive, a culture of “as well as” is required. In the future, every company will be confronted with this dilemma. How can the company’s next step of cultural development be realised?
1. A conscious decision by top management. Cultural changes can only be realised if they are truly wanted and are actively promoted by the management of the company. This starts by recognising that it is no longer sufficient to secure the status quo or to further develop cooperation and management by one step at a time. Just take a realistic look at the increasing pace of change in your market environment and honestly compare it to the ability to change and the pace of innovation within your company.
2. Show the need for change – clarify goals and vision. Experience has shown that conveying the markets pressures, the dynamic customer demands and the rapid pace of change to executives and employees poses one of the first communicative challenges to management – especially if the company is currently very successful. The best way to address this is by putting away the strategy charts and instead presenting the current state of things, and your goals and visions for the future. Do so using simple words and pictures backed by specific examples geared towards various departments. This requires a common understanding amongst senior management of the company’s goals, image and the way in which its future story will unfold. Spending time on this is worth the effort. First, gather executives from a range of different levels. Work out the consequences of the changes together. Only then, step by step, can you present the company’s story to the entire team.
3. Define what will change and what will remain the same. Companies need clear core processes and rules, which must remain critical for day-to-day business. It is important that you not only look to and talk about the people who will break new ground – but also acknowledge those who secure the core business.
4. Link cultural change with one specific key project or a relevant change process. Corporate culture is hard to change by means of a distinct “culture project”. It is best if executives and employees experience the need for change first-hand. That is why it is helpful to link cultural change to current changes within the organisation.
5. Trying out new things and gaining experience. New approaches to working together have to be compatible with the company – and may still have to be developed in many areas. There are various established methods of collaboration for agile teams (e.g. SCRUM). Implementing them involves leaving the beaten track, especially in interdepartmental projects. An agile team works in a quick and flexible way, free of previously defined project structures and processes. Team members contribute their expertise, regardless of their area of responsibility. Implementing or optimising individual actions is not decisive here; what counts is finding the fast and the perfectly tailored innovative solution. This means changing the way of thinking on all levels. Mistakes are part of the concept, and what is really important here are the experiences that are gained in such a short amount of time.
6. Management needs to serve as a role model for cultural change. Changing corporate culture and introducing new, unfamiliar ways of working requires patience, courage, persistence and consistency. Regardless of the effort, the methodology or whatever kind of investment you use to drive this change, it will only be successful if the management team lives the new culture on a daily basis.
7. Leadership in the digital world – personal, trustworthy and clear. In the digital era, digital communication is often considered the easiest and most effective way to address the new challenges an executive faces. However, the opposite is true. Personal communication, in particular, has become vital as a leadership and management tool. It creates credibility, transparency and clarity – providing that it is honest, understandable, consistent, timely and sustainable. A structured dialogue on all hierarchical levels. Effective communication creates security for executives and employees, and functions as a prerequisite for a company’s ability to adapt quickly.
Corporate Culture – the success factor in a digital world. In fact, having a good corporate culture is an important competitive advantage. From viewpoint of urgently needed skilled employees it is a selection criterion as well. The quality of a corporate culture becomes apparent when looking at the daily interactions: from how people talk to each other, how well executives and employees are involved in important changes, how understandable and useful information is conveyed, and whether “bosses” convey tough messages personally in an understandable context. Trust is built by staying in touch.
In order to be universally competitive, it is important that all executives are aware of how important the corporate culture is. Also they must understand that the culture is shaped by the way these executives communicate. In growing complex structures with daily data overflow, leadership will primarily work through personal dialogue. And time invested in this will produce excellent returns.
Axel und Felix Kühn
The brothers Axel and Felix Kühn have been advising entrepreneurs and executives throughout complex organisational and cultural changes, communication and crisis management for many years. Axel Kühn is a journalist and director and also teaches at the Konstanz University of Applied Sciences. Felix Kühn, a communication and PR expert, set up and managed the communication of a listed company for years.